Tegbi Products has a bond issue outstanding that matures in 12 years. The bonds pay interest semi-annually.
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Question:
Tegbi Products has a bond issue outstanding that matures in 12 years. The bonds pay interest semi-annually. Currently, the bonds are quoted at 102.5 percent of face value and carry an 8.5 percent coupon. The firm's tax rate is 35 percent. What is Tegbi's after-tax cost of debt?
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